April 15, Again

Thursday April 14 2010

John Stossel is fed up with the income tax, and as he says, how dare a government do this to its own people.  He notes the cost of complying with tax filing that could be spent much better in other ways. Oddly I never hear CPAs addressing this issue. I would agree that vast amounts of money and time are wasted on tax preparation. 

An article from the WSJ lists several ways to deal with the IRS.  The truth of course is that one should conduct one's affairs in such a manner that the IRS does not come knocking. If they do, be prepared with full explanations for each of their questions. Do not represent yourself, retain a professional who will not be emotionally involved. If the IRS comes to your office, have an office cleaned out and ready for him or her, one that is well lit and appointed, such professional treatment is appreciated. No do not put the agent in the basement with a single 25 watt bulb overhead....

An auditor is looking for someone that is unprepared. If you have a folder with a written answer for every question, a nice place for them to work, a tax prof there to answer questions, chances are they will sum things up, ask for some money and move on looking for a better mark, so to speak. 
In the article, the taxpayer decides to fight on over $151. This is ridiculous, if the amount they ask gets anywhere reasonable, pay off, it is cheaper than fighting and the agent gets to say they achieved something. 

Meanwhile hundreds of tax protests take place across America. TEA party stands for Taxed Enough Already. Harry Browne who ran as the Libertarian candidate for President wrote in his book, Why Government Does Not Work, that one party was liable to disappear. No, not the Democrats, Harry suggested that it would be the Republicans as they did not stand for anything. The TEA party movement lacks a spark type event, and a leader. One wonders if the entire Republican Party could implode ovetnight rather like Arthur Andersen. Just a thought.....The Republican Party was carried into national office by the onset of the Civil War. It is just such landmark events that both create and destroy long standing institutions. 

Comments

[Joy]

I don't see any chance of taxes being lowered as the U.S. deficit continues to grow. For those of us who want to have a career in accounting, sounds like there will always be a challenge as we try to keep up with the latest tax changes.

[Laura contreras]

I don’t understand, and I hear it over and over. If the IRS say you owe less then 1,000 then people should just pay it, because it would cost more to fight it but It shouldn’t be that way. That is the same thing they say about a traffic ticket, it you get a speeding ticket and you were not speeding just pay it because again it would cost you more money just to fight it. To me the system is broken.

[Dennis Elam]

This is a coutnry that lets you complete your own tax return. The outcome is subject to scrutiny. The outcome of that scrutiny is subject to negotiation. A good part of successful negotiation is letting the other chap feel that he or she got the better part of the bargain. This way the IRS agent feels and can report that they brought something home, a great strategy for you the CPA.